Focus FX Currency Forecast

28 Februarie 2011

RAIFFEISEN BANK S.A.

 

EUR/CHF

EUR/CHF: 1.281 - 1.30 (March)

After trading at around EUR/CHF 1.32 in mid-February, the franc has since appreciated by over 3% to the current rate of EUR/CHF 1.281. In recent days, classic "safe haven" assets, such as German government bonds and the Swiss franc, have posted gains thanks to the escalation of violence in Libya and in other parts of the Arab world. If social unrest spreads to major oil-producing countries such as Saudi Arabia and leads to similar changes as seen in Egypt and Tunisia, the global economy may be seriously influenced with an unforeseeable outcome. One possible result of this would probably be strong appreciation for the Swiss franc. Ultimately, economic factors should gain the upper hand again and determine the exchange rate development of the franc. In the first half of 2011, the economic factors would actually point to a weaker franc. The debate about (overly) strong inflation in the euro area (currently at 2.4%) and the possibility of corresponding rate hikes by the ECB, along with the robust economic performance in the (core) European countries, has supported the euro in recent months. But as long as tensions do not ease in the Arab world, the Swiss franc will probably remain strong.

Trading Ideas

Note: This list contains only the strongest trading ideas for the markets that we cover. Therefore not every market forecast that implies a buy recommendation is also listed as a trading idea! Trading ideas may also differ from our quarterly forecasts. as the time horizon can be different. The time horizon of the trade is at least two weeks, but not more than 3 months.

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